Thursday, March 15, 2012

One tiny segment of the stock market carries the label "Royalty Companies." No, you don't get to buy a share of Buckingham Palace. You get to buy a share of a company that finances the development of mines, oil wells and other resource developments in return for a piece of the action.

The appeal of Royalty Companies is simple. They put a boundary around the kinds of risks that an investor in these areas is exposed to. Country risk? Lower if the Royalty Company invests in several jurisdictions. Exploration risk? No, they invest in developments where the exploration has already delivered proven results. Production risk? Some, but diversified. Price risk? Well, yeah, some price risk, but many of the deals actually hedge price risk in some way.

Who are these companies? In Canada, Silver Wheaton (SLW) is not the oldest but is a great example. Royal Gold, Franco Nevada are other well-known, reputable firms. These guys are listed on major exchanges and provide interesting exposure to precious metals prices. And when precious metal prices take off, these firms leverage the gains. After all, they have no operating costs to worry about, the way actual miners do.

One junior firm that caught my eye a couple of years back is called Sandstorm. Sandstorm operates a Precious Metals firm called Sandstorm Gold (SSL on the Canadian Venture Exchange) and a non-Precious Metals firm called Sandstorm Metals & Energy (SND on that same exchange). The brains behind Sandstorm used to be the CFO of Silver Wheaton; he knows whereof he speaks.

Sandstorm has come to the attention of some reputable investment analysts. I am not one of them and this is not investment advice. Don't lose your mind here. But I do own shares in both SSL and SND.

Here is what I find interesting. Both companies have been rising for the past months, but the ratio between SSL and SND may have stopped rising. If you were to buy just one of the two, which would you buy? For the past six months, the SSL buyers would have laughed at the SND buyers. Now it looks as if it is the turn of the SND buyers to begin to laugh. The ratio is just dropping below the blue 50 day moving average line. Stay tuned!

Tuesday, March 13, 2012

Our ancestors would marvel at our big conveniences (what would St. Augustin have said if someone had shown him a car?) but they might laugh at our little conveniences. A garage door opener, for instance.

So what. They should get with the times or stay where they are. The reactions of the ancients don't matter much. But what does matter is when last generation's technology still works but is no longer supported. That is just waste, and it bugs me.

So in this house that we recently acquired is a first class, smoothly operating, ultra-reliable Canadian-made Steel-Craft garage door opener. Two, actually, dating back to about 1983, but only one remote control. And a garage door opener without a remote is actually an anti-convenience, because you have to go around and inside the house to open the door that you could have opened, if it was strictly manual, by standing in front of it.

Steel-Craft uses components from LiftMaster, one of the big two surviving giants in the business. (The other is Genie, which I have no recent experience with). LiftMaster has been in business for over 100 years, and have had to keep up with the times. A LiftMaster garage door opener from the late 1970s relied on a remote control that had 9 little switches in it. As long as you set your 9 switches in different positions from anyone else in the neighborhood, your opener would not open anyone else's, and theirs would not open yours.

Then some perpetrator figured out that with a 315Mhz scanner, he could lurk around neighborhoods and either steal codes as people used them, or work through the fairly small number of combinations of switch settings. And when the owner of a house with an attached garage was away, the perp would open the garage, enter it and get into the house through the most vulnerable entrance.

Modern remotes use a rolling code system that makes it almost impossible to steal codes. And they don't have any way of activating that quaint 9 switch system. If you have a pre-1984 garage door remote from LiftMaster, Sears
Craftsman, True Value, True Guard, Garage Master, Master Mechanic, Home Hardware
(Canada), Steel Craft, Access Master, Do-Its, Anaheim Door, or Garage Door of
Indianapolis, chances are that remote was manufactured by a company called Chamberlain and it is near the end of its commercial life. These are not supported any more and their replacements are getting harder to find.

My one original remote is a Chamberlain 51LC. I need another one for the other door. Know what? You can search the internet all day for replacement remotes and not find a reference to a 51LC. Unless, of course, you check in with Halfwise, who is here to tell you that a LiftMaster 361LM will replace a 51LC. So will a 362LM, and it comes with two buttons and two sets of 9 coding switches, one for each door. Got 3 doors? Get a 363LM.

Sunday, March 04, 2012

It is fun to play cards, especially when the game involves both luck and skill like the trick-taking games in the Bridge/Whist family.

What do you do when there are only three people around? Inviting the cat to play is not always satisfying...

They get bored so easily, don't they?

We are big fans of the game 9-5-2, also known as Sergeant Major. And through the magic of the Internet, we have access to a couple of versions of the basic rules, along with some optional rules that come up as people experience the ups and downs of the game and want to introduce something to make the game even more enjoyable.

A quick overview: 9-5-2 is a game for 3 people, played with a normal deck of 52 cards. Each player starts with 16 cards, and there is a kitty of 4 cards set aside during the deal. The dealer has a target to take at least 9 tricks; the player to dealer's left must take at least 5, and the third player must take at least 2.

If you surpass your target, you are rewarded on the next hand with the privilege of passing low cards from your hand to the players who failed to make their targets, and they must return to you the highest card they have in that suit. This exchange means the rich tend to get richer as the game goes on, and the misery of losing is compounded by having to endure the humiliation caused by smirking opponents passing you their 2s and 3s so that you can bless them with your precious aces and kings.

We add two local rules to even things out. On the very first hand of the game, we play 9-4-3 instead of 9-5-2. In the first hand, having to get 5 is too hard, and having to get 2 is too easy. So it's 9-4-3 for the first hand then 9-5-2 after that.

Our second rule is contrary genius. Let's say that you are the dealer this hand, and you were down 4 tricks going into your deal. You are going to get 4 pretty low cards and give away 4 pretty high cards. The rule is...you have the option of calling "Low No Trump" where the lowest card of the suit led wins the trick. A person can do pretty well with a hand that is total crap by normal standards. The "Low No" rule does not show up in the rules I linked to above.

The result? Better mental health, better relationships at the table. What a great game.

Thursday, March 01, 2012

The Halfwise household has moved from Alberta to British Columbia. We have to get driver's licenses, and new plates for the cars, and insurance and so forth. It's mostly government-run here on the coast whereas in Alberta the agencies that handle this are strictly private.

So there we sat clutching our various Alberta documents, watching the knowledgeable young lady work through the handwritten forms (in 2012) and the phone calls to someone in charge of a database somewhere (in 2012) and the questions about our driving records. What takes 20 minutes in the privatized province next door took 2 hours.

I was asked whether I had ever had a speeding ticket in BC and I answered "probably" because I do indeed recall being pulled over somewhere in the mountains and I did not have any points on my Alberta license as a result, so it must have been BC.

She enters my Alberta driver's license data and brightens right up..."Oh look, you are already a client in our system!" She then asked about an address which I last occupied in about 1996, which is when the speedin' deed was perpetrated.

Apparently, having violated the Traffic Act makes me a "client." The word "client" must not mean what I have always thought it meant.